Q601
Prospectus which describe new securities are distributed before their registration is classified as
A.
red herring prospectus
AnswerB.
white herring prospectus
C.
pre-emptive prospectus
D.
securitized prospectus
Answer: Option A
Solution
Answer: Option A
Solution:
Prospectus which describe new securities are distributed before their registration is classified as red herring prospectus. Red Herring Prospectus is a prospectus, which does not have details of either price or number of shares being offered, or the amount of issue. This means that in case price is not disclosed, the number of shares and the upper and lower price bands are disclosed.